Tuesday, November 23, 2021

A New Estate Planning Strategy

During the past 18 months of the Covid Crisis I have been fortunate to be able to continue Networking with many different types of advisors and providers. One of the more interesting providers I met is a group that can provide high value Life Insurance with no cash layout and no premium payments. 


This Estate Planning Strategy has several net-worth requirements and 

 is a way to provide life insurance benefits to family, business, and charitable causes. These individuals work with your legal counsel and accountants, so it best meets your needs. 


My understanding of the program is that you would put a current asset as “collateral”, they would work with specific banks to write and issue a bond that covers all costs and premiums.

 

I was very intrigued by this Estate Planning Strategy and simply wanted to bring it to your attention. If you would like more detailed information, I would be happy to introduce you to the individuals I networked with.

Tuesday, June 8, 2021

Can The Next Generation In The Family Business Say We Did It?

Many founders of businesses who want to pass the business to their children find it difficult to actually do so.  Developing a plan, crafting a process for the development of the next generation, and transitioning of the business to the next generation can feel like a foreign concept or unchartered territory. 

The founder’s heart is generally in the right place in his or her desire for the next generation to take over the business.  However, it is not uncommon to hear statements like the following from the senior generation: why don’t they tell me what they want to do? what do they want? why won’t they just step up and take responsibility? what do they expect of us?” 

The next generation, on the other hand, is often wondering: why doesn’t Dad / Mom just tell us what they want? which one of us will be president? when will they retire? what will they do when they retire?

Too often, the next generation is not given opportunities to learn how to make critical long-term strategic decisions and is not given a chance to participate in family leadership meetings to learn how to analyze both family and business issues.  In some situations, the next generation is never truly given the opportunity to learn how to operate the business.

It is critical for the senior generation to consciously help the next generation grow. The next generation needs to gain the expertise, experience, mentoring, tacit knowledge, passion, and internal drive to continue building the family legacy. The next generation needs to hear praise, encouragement, appropriate guidance, and the confidence of the senior generation. When the proper plans, processes, and guidance are in place by the senior leadership, the next generation can continue building the legacy.

A leader is best when people barely know he or she exists, not so good when people obey and acclaim him or her, worst when they despise them.  But of a good leader, who talks little, when their work is done, their aim fulfilled, they will say, 'We did this ourselves.'

— Lao-Tse



What are you doing to prepare the next generation?

 What would the next generation say?

Tuesday, April 20, 2021

Why The Family Business?

A family member working in his family business was asked the question, 

            “Why does your family business exist?”

 

The response was a long period of silence, followed by, 

            “I never really thought about it.  It was always just here!”

 

If you were to stand at the door of your business and ask each family member and non-family employee that goes in and out of the business that question, how would they respond?

 

Why is this question so important?

 

As a business family – Why does your family business exist?

 

The definition of success in a business family may be in the eye of the beholder. The measure of success must be determined and agreed upon by all in the family and the business. When family members are able to share their thoughts, hopes, and dreams in a safe environment, the opportunity to increase family commitment, business growth, and build a family legacy will increase.

 

Why is your family in business together?  Is it just a way to pay bills? Is it to provide employment for all family members that need a job? Is it to harvest the business and cash out? Is it to build a family legacy with an entrepreneurial mindset? Is it to build a family legacy? Is it to pass the business to future generations?

 

Your family’s dialogue about these questions may be more important than the answers and can provide the basis for putting the pieces in place to building a lasting family legacy. Families that diligently work to build a shared understanding of WHY they own – based on an appreciation of different perspectives, generally have a better understanding about HOW and WHAT they own. Whether in the Entrepreneurial stage, the Sibling Partnership stage, or the Cousin Consortium stage, every business family must explore these questions and determine the needs for the next stage and for the family’s legacy.

 

As a business family, take the time and do the hard work dialoguing with your family to build your roadmap for the success of your family, the ownership group, and the business management.



Tuesday, March 23, 2021

Challenges Can Be Overcome In A Family Business

Each and every day we deal with family businesses ranging from our local car dealership, to the corner store, the dry cleaners, Wal-Mart, and the local pharmacy. It is estimated that family businesses employ more than 60% of the US workforce. Family businesses are the backbone of our economy and have many competitive advantages: strength of relationships, cultural fit of family members, shared faith and values, strong commitment of those involved, strong work ethic of family members, patient capital, and flexibility in hard times. 

 

It is no secret that each generation of a family-owned business faces unique challenges. Yet, for many, the term family business can conjure up stereotypes of family squabbles, mom and pop shops, nepotism, and lack of sophistication. While there are businesses that fit some (or all) of those stereotypes, it is our experience that these stereotypes are not an accurate description of many family-owned businesses.  Indeed, we continue to see many family businesses that are thriving, growing, and using their family ownership as a long-term competitive advantage. Well-run family businesses, in it for the long haul, stay focused on the things that will help them navigate the ever-changing challenges that they face.

 

What are some of those themes that help family businesses sustain themselves for the long haul?

 

1)    Retention of both family and non-family talent. Retention is nurtured through a level of trust, commitment to the vision, strong job knowledge, fair pay, a winning culture, and opportunity for growth.

2)    Wise financial management with patient capital. Maintaining the concept of frugality allows the family, the business, and the ownership to be ready for the next opportunity and to weather the next downturn.

3)    Openness and transparency.  The family has a willingness to discuss sensitive issues with transparency and openness. 

4)    Effective structures.  There is commitment to systems, processes, and practices that provide the right structure for their family, business, and customers.

5)    Intentional development.  Families in business that are committed to the long haul, consistently and intentionally set aside time to discuss and revisit the first four themes so they can keep up with changes in the family, the business, and the ownership. 

 

 

To implement and maintain these themes business families seek to revisit the themes with an unbiased eye. Families in it for the long haul utilize unbiased, third party resources who can help the family achieve family goals by helping to establish the framework, boundaries, training, talent development, and reflective planning for the future.

Tuesday, January 12, 2021

I Can't Hear A Word You Are Saying

 

Our children, family, employees, customers, vendors, neighbors, (and the list could on and on) are not necessarily awestruck by what we say, BUT they are struck by what we do and how we act.


How aligned are our actions with our rhetoric?


Some time ago, I was talking with a Family Business owner whose business was struggling to survive. She stated she was also struggling to find, hire, and retain “good help”. In the course of our conversation, she stated employees who had a strong work ethic, were honest, and willing to put in a “full day” just did not exist anymore. She continued to talk of her struggles and related a story of a customer. 


This particular customer told this businesswoman they did not receive certain product they had paid for. This Family Business leader stated she knew the product was delivered as she personally delivered the product. So rather than discuss the issue with the customer she advised her delivery staff to “pad” the bill each time they delivered product to that particular customer.


I then proceeded to ask her what she would do if she caught one of her employees, or children, “padding” their Timecard because they felt they were not being paid appropriately?


As leaders in our families and in our businesses are, we modeling the behaviors that match our stated values?


Are we showing / modeling respect?

Are we showing / modeling honesty?

Are we showing / modeling credibility?

Are we showing / modeling commitment?

Are we showing / modeling our stated core values?


Are your actions speaking so loud people cannot hear a word our saying?


 What examples can you provide?

“When your values are clear to you, making decisions becomes easier.”

Roy E. Disney